Psychometric Assessments: A Means to Reduce Turnover in Retail

2 workers working at a shop - Pearson TalentLens

The retail sector has long been associated with high turnover rates. It hovers around 60%, meaning that more than half of the staff is likely to change within a year, according to McKinsey. It is imperative for companies operating in this sector to refine their HR practices to optimize employee retention because high turnover rates have significant impacts on their commercial performance. They can rely on psychometric assessments for this purpose.


Turnover Rate: A Key Performance Indicator

The turnover rate (or employee turnover) is a key performance indicator (KPI) that quantifies the rate of voluntary or involuntary departure and replacement of personnel within an organization during a specific period. It assesses the stability of its workforce and its overall health.

A high turnover rate often reflects employee dissatisfaction, inefficient recruitment or onboarding processes, and any potential organizational issues within the company.

Conversely, a low turnover rate reveals employee satisfaction, effective talent retention strategies, and a pleasant work environment.


The Proven and Hidden Costs of High Turnover Rates

 Understanding and analyzing the turnover rate is a strategic imperative. It directly impacts the company's finances and indirectly affects its operational effectiveness.

  • Costs of Departure/Recruitment: On average, turnover costs in the retail sector represent 1.5 to 2 times an employee's annual salary, according to Built In. Each time an employee leaves the company, the recruitment, onboarding, and training process must be restarted, and human and financial resources must be allocated to ensure their replacement. The departure of an employee can also entail severance payments. Furthermore, the time it takes for vacant positions to be filled and new employees to become operational, the workload for existing employees may lead to overtime payments, directly impacting the company's financial costs.
  • Loss of Production: Turnover affects operational continuity, team cohesion and productivity, and company performance. Constant staff turnover can lead to dissatisfaction among existing employees, even encouraging new departures. Turnover, in this sense, can lead to decreased employee engagement, especially if it is high, and impact on the customer experience and sales due to a loss of service quality.
  •  Negative Impact on the Company's Brand Image: Employees who work in a company with high turnover are unlikely to recommend it to others as a place to work or even to use its services or buy its products. The company loses attractiveness.


The Role of Psychometric Assessments in Employee Retention

Psychometric tests explore personality, assess abilities, identify motivations, interests, and values of an individual.

  • Personality Inventories: They assess personality traits, which are behavioral tendencies and interpersonal characteristics related to relationships with others (leadership, sociability, cooperation, empathy, etc.), emotional management (stress resistance, flexibility/adaptability, etc.), work approach (reliability, attention to detail, regulatory compliance aspect, success/effort, perseverance, initiative, etc.), and mode of thinking (innovation, analytical reasoning, independence, etc.).
  • Intellectual Aptitude Tests: They provide information on numerical, verbal, spatial, and mechanical skills as well as the ability to solve complex problems and the ease of learning. They also assess critical thinking (ability to quickly grasp key aspects that will impact any decision, distinguish assumptions from facts, evaluate arguments in favor of possible actions, and draw conclusions that will lead to objective decision-making).
  • Motivation and Professional Interest Questionnaires: They provide information on an individual's motivational state, sources of motivation/demotivation, professional interests, needs, and values to better support them in developing their career plan and make them feel fulfilled professionally within the company.

In recruitment, psychometric tests allow retail companies to:

  • Gain in-depth knowledge of a candidate's potential, beyond their resume.
  • Secure recruitment through concrete and reliable information provided.
  • Ensure the candidate's profile matches the job requirements and reduce turnover.
  • Enhance the candidate's experience by identifying their strengths and areas for improvement.

In development, psychometric tests allow them to:

  • Identify and develop the potential of their employees.
  • Identify their skills for better development.
  • Support internal mobility.
  • Better understand each staff member to improve their employee experience.


To reduce their turnover rates, retail companies must rethink their talent acquisition and retention strategies. The use of psychometric tests allows them to recruit individuals whose profile aligns with the company's culture and the position to be filled, ensure they have the necessary skills, and evaluate those that are useful to develop to encourage them to stay and evolve within the company for as long as possible.